How the American IDEA Act Will Help Small Business

Intellectual property (IP) theft has severe consequences for U.S. business, and many companies—particularly small businesses—can feel overwhelmed at the seemingly insurmountable task of stopping IP theft that occurs overseas. Introduced by Senators Tammy Baldwin (D-WI) and John Cornyn (R-TX) earlier this summer, the American IP Defense and Enforcement Advancement Act, or the “American IDEA Act,” promises to protect U.S. businesses against international IP theft. It is not to be confused with the Inventor Diversity for Economic Advancement (IDEA) Act, which aims to improve demographic data-gathering efforts at the U.S. Patent and Trademark Office (USPTO).

The bill, introduced on July 27, 2023, proposes to fund law enforcement agencies to improve IP enforcement, to direct studies on how to protect U.S. IP, and to support legal aid programs to assist small businesses in protecting their intellectual property. Additionally, the Act would strengthen existing laws, in part by reauthorizing certain provisions of the Prioritizing Resources and Organization for Intellectual Property Act of 2008 (“PRO-IP Act”) (15 U.S.C. §§ 8111-8116), which enhanced remedies for violations of intellectual property laws. The PRO-IP Act was also a bipartisan bill, and the American IDEA Act shows that IP protection continues to find support on both sides of the aisle.

Strengthening Current Agencies

The PRO-IP Act of 2008 established the Office of the Intellectual Property Coordinator (IPEC), a position to coordinate federal efforts against counterfeiting and IP infringement. IPEC is responsible for the coordination and development of a joint strategic plan against counterfeiting and infringement, which the American IDEA Act would expand to include actions specific to IP theft in certain priority countries. Specifically, the American IDEA Act would make explicit a requirement for the plan to address and include strategies to prevent the “unlawful taking or use of intellectual property from corporations and universities located in the United States, particularly by entities or individuals located in a priority watch list country.’’

Watch List Countries are designated every year in a special report by the U.S. Trade Representative (USTR) and identify the U.S. trading partners who present the most significant concerns regarding insufficient IP protection and enforcement. This year, the priority countries identified were Argentina, Chile, China, India, Indonesia, Russia, and Venezuela. The USTR considers new and evolving factors in creating its annual list. For instance, Belarus was added to the 2023 Watch List in response to a recent law there that legalized unlicensed use of certain copyrighted works if the right holder is from a foreign state “committing unfriendly actions,” which include sanctioning Belarus for its role in Russia’s unprovoked invasion of Ukraine. As multiple IP right holders discovered in the last year and a half, protections for brands from countries “unfriendly” to Russia have been met with disregard in that country, and the USTR now notes that this is likely to occur in Belarus as well.

In addition to targeting foreign countries in combating IP infringement, the American IDEA Act would also fund local law enforcement as part of an Intellectual Property Enforcement Program under 34 USCS § 30103. The program would allow the Department of Justice to offer grants to eligible state or local law enforcement entities “to aid in the training, prevention, enforcement, and prosecution of intellectual property theft and infringement crimes.” This would include facilitating coordination between state and local law enforcement officers and prosecutors and Federal law enforcement agencies in the enforcement of intellectual property laws.

Facilitating Pro-IP Studies and Programs

Beyond enhancing existing laws, the American IDEA Act would authorize two new Government Accountability Office (GAO) studies. One would assess how the Federal Government could better protect the intellectual property of manufacturers in priority watch list countries. The other would study whether the Federal Government could use diplomatic and trade channels to improve IP protections in watch list countries and evaluate how to better recover financial losses suffered by U.S. individuals and businesses resulting from a denial of adequate and effective IP protection in those countries.

Finally, the American IDEA Act would create a grant program specifically to fund legal aid programs to assist small businesses in protecting their intellectual property. The grant would make funds available to any American Bar Association-accredited law school, state bar association, or legal services organization providing no-cost or low-cost legal advice on the protection and enforcement of intellectual property rights to small businesses with an estimated annual revenue of not more than $150,000. The program would also fund the development and delivery of training programs and materials for small businesses relating to the protection and enforcement of intellectual property rights.

But Don’t Wait on Legislation

The American IDEA Act promises to take important steps to protect U.S. companies from foreign IP theft. However, even if the bill passes, it will take time to see what comes of the newly focused IPEC strategic plan, the local law enforcement initiatives, the GAO studies, or the new legal aid programs. For that reason, it is important for U.S. companies—and in particular small businesses—to know that they can take immediate steps today in order to be proactive about protecting their IP. These steps include registering their trademarks, copyrights, and patents both in the United States and overseas, recording their marks with U.S. Customs and Border Control to stop counterfeit imports, maintaining brand watches and monitoring services to detect infringing parties, and implementing robust measures to protect any trade secrets. By taking proactive measures to protect their IP, businesses can insulate themselves against the financial and reputational damage that can result from IP theft.

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